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Cross-practice growth drives A&O annual results

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Wim Dejonghe

Senior Partner

London

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Gareth Price

Managing Partner

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15 July 2021

Allen & Overy has announced its annual results for the year ended 30 April 2021, which saw a good performance from the firm in its first full trading year since the start of the global Covid-19 pandemic. 

In summary:

  • Client revenue up by GBP80 million (5%) to GBP1.77billion (US2.32bn; EUR1.98bn)
  • Profit before tax up 19% to GBP822 million (USD1.08bn; EUR921m)
  • Profit per equity partner (PEP) up 17% to GBP1.90 million (USD2.48m; EUR2.12m)
  • Increased revenue in all transactional and disputes practices
  • Strong performance in all regions, in particular the UK, Western Europe, Central and Eastern Europe and the U.S.
  • Advanced Delivery & Solutions continued its growth and saw an increasing proportion of our lawyers using legaltech tools and advanced delivery methods
  • Continued progress on diversity and inclusion programmes and wellbeing

Commenting on the results, global managing partner Gareth Price said: “Like many organisations, we have been really tested over the last year and I’m proud of all our people and the way we responded. We took the time to find out the specific needs of our clients as Covid hit and gave them the support they needed. We focused on the wellbeing of colleagues as they worked remotely and often very long hours. And we looked after the people in our supply chain in a responsible way. The culture we have built over many years and the short-term decisions we took early on ensured that our business not only survived but thrived during the pandemic, without seeking any government support. Our services are more in demand now than ever in our history and we have started the new financial year strongly, driven in particular by exceptionally high levels of M&A activity.”

A globally diversified business

A&O’s international network, the broadest among the global elite law firms, delivered a strong performance across all regions, in particular in the UK, Western Europe, Central and Eastern Europe and in the U.S. where the firm has continued to build its presence, adding a total of 14 new partners and opening a West Coast office in Los Angeles.

Each of the transactional and disputes practices saw strong revenue growth. A&O was the world’s leading transactional law firm, advising on 12% more deals than any other firm in 2020, as well as taking a leading position in growing markets such as U.S. and European SPACs, both from an M&A and a capital markets perspective. Meanwhile A&O was appointed as global IBOR Transition Counsel by many of the leading global banks, and by most key measures, the firm also does more renewable energy work than any other law firm in the world.

Litigation has been supporting clients with the effects of emergency legislation, contingency planning, contractual impacts, employment issues, and insurance-related claims. The firm anticipates that the coming year will see high activity levels as disputes continue to crystallise, and the practice continues to invest across the core areas of commercial and banking litigation, investigations, employment, international arbitration and intellectual property.

In the Banking practice the restructuring, leveraged finance and asset finance practices were particular standouts, each delivering stellar results following a year supporting clients during turbulent credit markets. The firm has made significant investment in the global practice in the past year, with 23 new partners across projects, restructuring, funds, fintech, leveraged finance, private credit and real estate.

Despite a softer start to the year as a result of the impacts of Covid-19, the global Corporate practice worked on an unprecedented level of transactions in the second half. A&O advised on a large share of the most complex cross-border and high-value deals, with a growing presence in sectors such as private equity, technology and life sciences.

The International Capital Markets practice performed strongly with securitisation, debt capital markets and corporate trust and agency in particular having stand-out years. The practice also continued to demonstrate its capabilities in relation to sustainable finance, which has seen global record numbers of ESG and sustainable-linked debt issuances. The firm has invested in the practice globally with lateral and internal hires, in its capabilities in sustainable finance, and in fintech and blockchain related finance.

Income for the Real Estate and Tax practices was broadly flat year-on-year.

Increased adoption of legal technology

Advanced Delivery & Solutions (AD&S), which provides a range of technology, resourcing and end-to-end solutions as well as specialist strategic advisory services through A&O Consulting, continued its growth and saw an increasing proportion of the firm’s lawyers using legaltech tools and advanced delivery methods. These capabilities enable A&O to both reshape how it delivers on its traditional instructions from clients as well as to develop new complementary services.  

Market interest in legal technology more broadly remains high: the firm received the highest number of applications yet with more than 150 companies looking to enter Fuse, its tech innovation space, with 15 lawtech and fintech firms selected for the fifth cohort. 

Continuing to invest in AD&S capabilities remains a strategic priority for the firm, with plans to further expand the coverage of alternative resourcing and legaltech teams outside of the UK.

Progress on environmental sustainability

A&O continues to support the UN Sustainable Development Goal 13 – Climate Action, and in the calendar year 2020 A&O reduced its total global emissions by 46%, which included a significant contribution from the drop in business travel and real estate emissions during the pandemic. Overall the firm has reduced its carbon emissions over the course of the last 10 years and recently made a commitment to accelerate its progress through setting a Science Based Target to halve direct and indirect global carbon emissions by 2030, against a 2019 base.

A responsible global employer

The firm continued its business-wide focus on diversity and inclusion in the last financial year, as it intensified efforts to bring about change on racial and ethnic diversity within its teams. A&O’s All In commitment, to assure an inclusive culture that celebrates and embraces difference, includes critical foundational work to ensure that all of A&O appreciates why an inclusive culture matters, the importance of allyship, and what steps partners and employees can take to become an ally.

The firm’s more than 40 Mental Health Advocates, who are partners and senior support professionals in every major office and practice group, have been working to embed the principles of the Mindful Business Charter, which the firm signed in May 2020 with the aim of reducing unnecessary sources of workplace stress.

Helping our wider communities

Over the past year, A&O lawyers have delivered 48,896 hours of pro bono and community investment (PBCI) work – an increase of more than 11%, nearly 5,000 hours, from the previous year. Business teams also contribute a significant amount of time and skills in support of the firm’s charity partners around the world.

The extra support provided to Global Charity Partner, Hope and Homes for Children, during the pandemic has helped the charity to reach 136,000 children during 2020 – its highest number ever – keeping them safe, paying rent for families at risk of eviction, providing food and medicines, deploying frontline social workers to respond to a surge in domestic violence and protecting children at risk of being sexually exploited or trafficked into forced labour.

The Covid-19 crisis has revealed the level of social inequality that still exists in so many countries around the world and, in many cases, exacerbated it. Our next global partnership, starting in September 2021 will therefore focus on tackling these inequalities.

Looking ahead

When Covid-19 lockdowns were imposed around the world, the firm’s offices quickly and efficiently transitioned to remote working. A&O will maintain this agile approach as the firm introduces hybrid working, with different countries adopting new practices on different timescales to reflect local conditions.

The office will remain incredibly important in terms of preserving the culture and community that saw 88% of the firm’s people say recently that A&O is a great place to work, and in providing a space for personal development. A&O expects many of its people to be spending a mix of time in the office and at home, in a way that works for them, their teams and clients.

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